'The end of the Irish miracle'

About two years ago Donnacha Minogue, a 55-year-old builder from Kilruane, Co. Tipperary, was able to sell his houses before they were even built. Then, a few months back, he noticed that demand had dropped, and his houses would sell while they were at foundation level. Today, he says, sometimes they don't sell until a few months after they have been finished.

The downturn in the Irish construction industry - one of the engines of the economy over the last few years - has been so dramatic that builders like Minogue are becoming increasingly nervous. A report from the Irish government jobs agency FAS said that a quarter of all construction workers will lose their jobs by next year.

Figures released from the Central Statistics Office reveal that employment in the construction sector had fallen to its lowest level in over four years. And that same week, it was reported that the number of builders on the dole had more than doubled in the past year, from 12,000 last year, to 24,500 this year.

Joe Ryan, 29, an electrician living in Dublin, was let go from his job about three weeks before Christmas. But he is one of the luckier ones. Because he has a trade, he is more in demand than others such as laborers. Shortly after Christmas, he was rehired with another firm. "The fellow I am with now seems to be doing okay," he says. "But it's hard to tell. The current job I'm on will last for another six weeks or so. I've no idea whether the boss has more work after that. I'll just have to keep the head down and see."

Rossa White, chief economist with Davy Stockbrokers, says that problems began in the late summer 2006, when "we moved from a situation where the market was very hot to a situation where the builders have turned off the taps." Housing, says Martin Whelan, head of public affairs with the Construction Industry Federation, has been particularly hard hit. "The market has stalled quite dramatically," Whelan says. "We are currently at our lowest levels of house building in 14 years."

And as White points out, even though developers have been cutting prices aggressively, the knock-on effect of the banks crisis has made mortgages much more difficult to access.The government argues that the downturn is mainly due to external factors, and in particular, the global credit crunch.

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Nster.com